Private Lending Agreements

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Private lending arrangements are often made between individuals, family members, business partners or private lenders. These arrangements should be documented carefully so the parties understand the loan amount, repayment terms, interest, default consequences and any security being provided.

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Where a loan is secured by property, the mortgage agreement and related loan documents should work together.

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Excel Legal can review the documents and explain matters such as:

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• who the borrower and lender are;

• the amount secured by the mortgage;

• whether interest or default interest applies;

• when repayment is required;

• what events may place the borrower in default;

• what the lender can do if the borrower defaults;

• whether the mortgage secures only one loan or broader obligations;

• whether there are fees, costs or enforcement expenses;

• whether a second mortgage or priority issue exists;

• whether consent from an existing lender may be required; and

• whether the agreement reflects the arrangement the parties intended.

 

Advice for Borrowers

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If you are borrowing money, a mortgage agreement may give the lender significant rights over your property. If the loan is not repaid or another default occurs, the lender may be able to take enforcement action.

 

Excel Legal can review the mortgage and loan documents with you, explain your obligations and identify key risks before you sign.

This may include advice on repayment obligations, interest, default interest, enforcement rights, costs, security, guarantees and the effect of registering a mortgage on title.

 

Advice for Guarantors and Third-Party Mortgagors

You may be asked to sign mortgage or guarantee documents even where you are receiving little or no direct benefit from the loan. This can happen where parents assist children, spouses assist each other, directors support company borrowing, or property owners provide security for another person’s debt.

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In NSW, the Law Society’s rules include prescribed declarations and acknowledgments for borrowers, guarantors and third-party mortgagors who receive legal advice in relation to loan and security documents.

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Excel Legal can explain the documents, the risks involved and the consequences of signing, including whether you may become personally liable or whether your property may be at risk if the borrower defaults.

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What We Review

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Depending on your matter, we can review and advise on:

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• mortgage agreements;

• loan agreements;

• private lending agreements;

• guarantees and indemnities;

• second mortgage documents;

• security documents;

• priority or consent documents;

• default notices or enforcement clauses;

• repayment terms;

• interest and default interest clauses;

• special conditions; and

• related signing or declaration documents.

 

Why Independent Legal Advice Matters

 

Mortgage and guarantee documents are often prepared by or for the lender. Legal advice gives you an opportunity to understand the documents from your own position before signing.

 

This is especially important where:

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• the loan amount is substantial;

• the property is your home;

• you are guaranteeing another person’s loan;

• you are providing property as security for a company or family member;

• the loan has high interest or default interest;

• the arrangement is private or informal;

• you are unsure what the documents mean; or

• you feel pressured to sign quickly.

 

The purpose of legal advice is to help you make an informed decision. It does not involve providing financial advice about whether the loan is commercially suitable for you.

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Our Process

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Excel Legal’s review and advice process is straightforward:

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1. Send Us the Documents

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You provide the mortgage agreement, loan agreement, guarantee, lender instructions and any related documents.

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2. We Review the Terms

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We review the documents and identify the key obligations, risks and issues that should be brought to your attention.

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3. We Explain the Documents

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We discuss the documents with you and explain their legal effect in clear, practical terms.

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4. You Decide Whether to Proceed

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After receiving advice, you decide whether you wish to sign the documents, seek amendments or obtain further financial or commercial advice.

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5. Signing and Declarations

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Where required, we can assist with the signing process and any relevant borrower, guarantor or third-party mortgagor declarations.

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Common Issues We Identify

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Mortgage agreements and private lending documents can raise issues such as:

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• broad security clauses;

• high default interest;

• unclear repayment dates;

• lender enforcement rights;

• personal liability under guarantees;

• liability for legal and enforcement costs;

• cross-default provisions;

• second mortgage priority risks;

• consent requirements from an existing lender;

• inconsistent loan and mortgage terms;

• unclear borrower or guarantor obligations; and

• insufficient documentation of a private lending arrangement.

 

Identifying these issues before signing can reduce the risk of confusion, disputes or unexpected consequences later.

 

Review and Advice for NSW Property Matters

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Excel Legal assists clients across New South Wales with review and advice on mortgage agreements, loan documents and private lending arrangements involving property.

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Whether you are a borrower, guarantor, private lender or property owner providing security, we can help you understand the documents before you commit.

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To begin, you can send Excel Legal the mortgage agreement, loan documents and any instructions you have received from the lender or broker. We can review the documents, explain the key terms and advise you on the legal effect of signing.